How to defend against Broadcom's VMware license price hikes

What's happening

As a VMware customer, you'll already be familiar with Broadcom's acquisition, and you are likely already having to deal with significant increases in costs for your VMWare estate.
The tactics Broadcom is using - cost increases and newly designed subscription 'bundles' have left some feeling "held to ransom"

There’s been a lot of press coverage on the issue, and customer reaction, most notably the report that AT&T is suing Broadcom for alleged retroactively changing existing VMware contracts to match its new corporate strategy.(1)

We’ve written before about the decline of VMware in a cloud-first world, and price increases are a way for Broadcom to recoup the acquisition costs for what we believe is a technology at the end of the maturity curve.

What options do you have?

Firstly, as ever, use only what is needed. VM proliferation is rife across our industry, and that leads to significant wastage and over-spend. Remove any and all workloads that are no longer needed and right-size all remaining VMs that have been over-provisioned. These two steps will help reduce the number of licences required by allowing you to shrink your VMware host server fleet

Plan ahead in time for your next renewal - be that VMware license renewal or base infrastructure refresh. There are other hypervisor options but if you are replacing like-for like on-premise, that will come at both a capital investment cost and a project cost. By drawing up a cost comparison (and implementation lead-time) of your alternatives, you can go into renewal negotiations fore-armed.

Broadcom's cost increases have likely moved the dial on any cloud migration you may have been considering. If a migration to a hyper-scaler can avoid costly VMware licences and a full hard-ware refresh cycle, it may be cost effective and bring other benefits too.

How can Refractis help

At Refractis, our consultants (collectively) have experience with most infrastructure, hypervisor and hyper-scaler offerings.

We have run multiple re-platforming projects, multiple datacentre migrations, and cloud migrations for two FTSE100 corporations.

We can help assess and cost your options to help you reach a decision, can help with strategic vendor negotiations, and can lead migration programmes once a strategy has been selected.

And the larger lesson?

Now may be the time to review estate-exposure to key technology vendors. Broadcom isn't the first to try to profit from significant vendor lock-in, and it won't be the last. 
Consider which vendors you are most exposed to, their licensing track-record, and if possible, the risk of sale/takeover. Assess alternative technologies and take a risk-based approach to mitigating any particular exposures.

(1) Why AT&T’s Suing Broadcom Over Forced VMware License Charges (forbes.com) (External site reference)